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Luxembourg Residency By Investment

Luxembourg has launched a new golden visa system that grants foreigners and third-country citizens residency permit of five years by stimulating significant investments in the country.

According to Forbes, Luxembourg, with a population of about 600,000, is the world's second-richest nation. Luxembourg is a landlocked Schengen nation bordered by Germany, France, and Belgium. Luxembourg is Europe's smallest nation and one of the three official capitals of the European Union, as well as the site of the European Court of Justice.

Luxembourg is a founding member of the European Union, the Organization for Economic Cooperation and Development, and Benelux. Luxembourg, the country's capital and largest city, is home to various European Union organizations and agencies.

The first Schengen agreement was signed in Luxembourg. The Schengen Agreement was initially signed in July 1985 in a small wine-making village in Luxembourg by five countries: Belgium, Germany, France, Luxembourg, and the Netherlands.

 

With your golden visa you can enjoy the cozy neighborhood of Luxembourg

With your golden visa you can enjoy the cozy neighborhood of Luxembourg

GOLDEN VISA

According to the government, third-country citizens may apply for a residence visa as an investor if they aim to invest in one of the four possibilities listed below:

EXISTING BUSINESS

Invest at least €500,000 ($533,325 USD) in an existing company with a registered office in Luxembourg and commit to staying for at least five years.

NEW BUSINESSES

Invest at least €500,000 ($533,325 USD) in a new business with a registered office in Luxembourg and at least five work positions within three years of the company's creation. Staff must be recruited in collaboration with the “Agence pour le développement de l'emploi” ADEM.

INVESTMENT FUNDS

Invest at least €3 million ($3,199,950 USD) in an existing or yet-to-be-created management and investment structure with a registered office in Luxembourg, where it must have and maintain the necessary finances.

BANK DEPOSIT

Invest at least €20 million ($21,333,000 USD) in the form of a fund deposit with a Luxembourg-based financial institution, with a commitment to retain the deposit for at least five years.

The acquisition of real estate does not qualify investors for a residence permit under this program.

The residence permit for "investors" is valid for three years and is renewed as long as the renewal criteria are satisfied.

The Minister of Economy is in charge of investment initiatives involving:

  • At least €500,000 ($533,325 USD) in an existing business;
  • At least €500,000 ($533,325 USD) in a new firm that has yet to be established.

The Minister of Finance is in charge of analyzing proof of investment of

  • At least €3 million ($3,199,950 USD) in a current or to-be-created management and investment structure;
  • At least €20 million ($21,333,000 USD) in the form of a deposit with a Luxembourg-based financial institution.

 

Relevant content: The Basics Of How To Get A Second Passport Or A Second Residency

 

Abbey De Neumunster is Luxembourg's postcard

Abbey De Neumunster is Luxembourg's postcard

PERMANENT RESIDENCY

It is possible to apply for permanent residency in Luxembourg after five years of continuous residence.

The duration of the visit is not considered to be interrupted by the following:

  • Temporary absences of less than six months that do not exceed a total of ten months in five years;
  • Uninterrupted absences of up to 12 months for important reasons such as pregnancy and delivery, a severe illness, or studies or professional training.

 

LUXEMBOURG CITIZENSHIP

Citizenship in Luxembourg is available after five years of residence and an understanding of the Luxembourgish language. Luxembourg nationality will be revoked for making false claims, concealing material facts, or engaging in fraudulent behaviour during the naturalization process.

 

LUXEMBOURG PASSPORT

Luxembourg's passport is the world's fourth most powerful, granting visa-free travel to 189 countries. With freedom of movement throughout the United Kingdom, Europe, Ireland, and many other countries around the globe. Below are the countries you can travel completely visa-free, though there are many more countries on the list which are visa on arrival and Electronic Travel Authorization (eTA).

 

Albania

Andorra

Anguilla

Antigua & Barbuda

Argentina

Armenia

Aruba

Austria

Bahamas

Barbados

Belarus

Belgium

Belize

Bermuda

Bolivia

Bonaire; St. Eustatius & Saba

Bosnia & Herzegovina

Botswana

Brazil

British Virgin Islands

Brunei

Bulgaria

Cape Verde

Cayman Islands

Chile

Colombia

Cook Islands

Costa Rica

Croatia

Curaçao

Cyprus

Czech Republic

Denmark

Dominica

Dominican Republic 

Ecuador

El Salvador

Estonia

eSwatini

Falkland Islands

Faroe Islands

Fiji

Finland

France

French Guiana

French Polynesia

Georgia

Germany

Gibraltar

Greece

Grenada

Greenland

Guatemala

Guyana

Haiti

Honduras

Hong Kong

Hungary

Iceland

Indonesia

Iraq

Ireland

Israel

Jamaica

Kazakhstan

Kiribati

Kosovo

Kyrgyzstan

Laos

Latvia

Lesotho

Liechtenstein

Lithuania

Macao

Malaysia

Malta

Mauritius

Micronesia

Moldova

Monaco

Montenegro

Montserrat

Morocco

Namibia

Netherlands

New Caledonia

Niue

North Macedonia

Norway

Oman

Palau Islands

Palestinian Territory

Parama

Paraguay

Peru

Philippines

Poland

Portugal

Qatar

Reunion

Romania

Samoa

San Marino

Sao Tome & Principe

Senegal

Serbia

Singapore

Slovakia

Slovenia

Solomon Islands

South Africa

South Korea

Spain

St. Kitts & Nevis

St. Lucia

St. Maarten

St. Vincent & the Grenadines

Sweden

Switzerland

Taiwan

Thailand

The Gambia

Timor-Leste

Tonga

Trinidad & Tobago

Tunisia

Turkey

Turks & Caicos

Tuvalu

Ukraine

United Arab Emirates

United Kingdom

Uruguay

Uzbekistan

Vanuatu

Venezuela

Vatican City

     

 

ABOUT LUXEMBOURG

Luxembourg has an excellent quality of life for both natives and expats. A genuinely cosmopolitan country with a long history of welcoming international residents, it is an ideal place to live, raise a family, and pursue an international career. Here are some facts about Luxembourg.

 

THE CLIMATE IN LUXEMBOURG

Although January and February may be freezing and can dip as low as -15°C (5°F), Luxembourg has a modified continental climate with pleasant winters. The summer months may be pretty warm, with highs of approximately 30°C (86°F) in July and August. All year round, there is a consistent and reasonable amount of rainfall.

The middle of May until the middle of September is the ideal travel period for any vacation in Luxembourg. The most comfortable temperatures and the greatest sunshine of the year are experienced during these months.

 

Vianden valley in Luxembourg

Vianden valley in Luxembourg

LANGUAGE AND ETHNICITY IN LUXEMBOURG

605,764 people are living in Luxembourg. 52.1% of the population of Luxembourg is made up of Luxembourgers. Portuguese, French, Italian, Belgian, German, Spanish, British, and other ethnicities reside in the nation. The native and official language of Luxembourg is Luxembourgish, and almost everyone speaks it. Other nationals will often speak their native tongue within their homes and with each other.

 

POLITICAL AND LEGAL SYSTEMS IN LUXEMBOURG

The Grand Duchy of Luxembourg is a parliamentary democracy, constitutional monarchy, and important financial hub. The nation is a founding member of the European Union and the Benelux Economic Union. The Grand Duke of Luxembourg is the head of state through monarchy. The Grand Duke appoints the prime minister as the head of state (usually the most popular voted candidate). In the Grand Duchy of Luxembourg's legislative system, a bill may be proposed by the government or the parliament.

 

Luxembourg has a strong steel industry

Luxembourg has a strong steel industry

ECONOMY IN LUXEMBOURG

Luxembourg is experiencing strong growth, low inflation, and low unemployment. Once dominated by steel, the industrial sector has expanded to include chemicals, machinery and equipment, rubber, automobile parts, and other goods. The most significant economic sector is the financial industry, which contributes around 36% of the GDP. In terms of GDP per capita, Luxembourg is one of the wealthiest nations in the world.

 

HEALTHCARE IN LUXEMBOURG

The public health system in Luxembourg is mandated and provides 98% of the population with universal coverage. You can select any hospital or physician for medical care if you have access to public health insurance. There is a private health sector, but it is primarily supplementary and fills in the reimbursement gap for medical expenses. In Luxembourg, almost 60% of residents choose this extra supplemental mutual insurance. No matter their wealth or social background, all patients are guaranteed equal treatment under the public system. Despite being among the most costly in the world, Luxembourg's healthcare system is also one of the most generous and comprehensive, with several general hospitals and specialized hospitals providing various forms of healthcare.

 

Luxembourg helthcare is the most generous and the most costly in the world

Luxembourg helthcare is the most generous and the most costly in the world

TAXATION IMPLICATIONS ON RESIDENCY IN LUXEMBOURG

Those who live in Luxembourg for more than 183 days are considered tax residents. As a result, owning a house in Luxembourg has no tax implications. In terms of taxes, high net-worth individuals may benefit from a variety of tax breaks when they become residents:

  • No wealth tax.
  • No inheritance or succession tax (direct line descendants)
  • The maximum tax rate is 41%.
  • There is no capital gains tax if the capital gain is less than 10% and held for at least six months.
  • Withholding tax of 20% on interest received from Luxembourg (flat-rate)
  • Dividends from Luxembourg are subject to a 15% withholding tax, followed by a regular rate with a 50% allowance.
  • Life assurance income is tax-free if kept for at least ten years.
  • 17% VAT on motor vehicles
  • A wide range of treaties to avoid double taxation
  • There is no CFC law, which implies that Luxembourg citizens are solely taxed on revenue from whatever firm they own in Luxembourg or overseas.
  • Alternative Investment Fund Managers pay a tax rate of 10.5%.

 

The Luxembourg Palace is one of the amazing places to visit while there

The Luxembourg Palace is one of the amazing places to visit while there

CONCLUSION

According to surveys and rankings worldwide, Luxembourg is one of the top 15 nations worldwide, offering the best quality of living. This is attributable to the beautiful scenery, cozy small-town atmosphere, and the nation's safety, political, and economic stability. It also has a great healthcare system for all both public and private.

 

WORK WITH ME

I help my clients to move offshore for freedom, privacy and autonomy by focusing on the immigration, legal, and tax issues that you will face when becoming an expat. If you would like to work one-on-one with me on getting out of Canada or the USA (or setting up a Plan-B location), then read this important letter and fill in an application form to become a Private Client. My fees are not cheap; however, I can assure you that when you work with a professional firm like ours, the results will be worth it.

 

BEST OF THE EXPAT WORLD

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Mikkel Thorup

Written by Mikkel Thorup

Mikkel Thorup is the world’s most sought-after expat consultant. He focuses on helping high-net-worth private clients to legally mitigate tax liabilities, obtain a second residency and citizenship, and assemble a portfolio of foreign investments including international real estate, timber plantations, agricultural land and other hard-money tangible assets. Mikkel is the Founder and CEO at Expat Money™, a private consulting firm started in 2017. He hosts the popular weekly podcast, the Expat Money Show, and wrote the definitive #1-Best Selling book Expat Secrets - How To Pay Zero Taxes, Live Overseas And Make Giant Piles Of Money.

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